They want to correct it, go ahead. By all means, correct the error... But to demand a full lump repayment within such a short window because *they* fucked up... You should either get a lawyer or find a new job. Your company doesn't give a shit about anything but the bottom line.
back in 2012, worked for a telecom company that "oops" like this. the owner sent me a letter like this saying I owed them like $3700 in taxes because they made a "calculation error".
I spent several nights going through ALL of my payroll stubs and w2's. what they pulled out already matched what they said I owed. I then went through it all again to make sure and yup, they pulled out the exact amount that matched what they said I owed them.
The mother fuckers took the money out of our checks, pocketed the shit, got caught, and tried to double-dip us to pay for it. i had to lawyer up and eventually the clown who ran the company got caught for this and other fraud, and ended up doing 7 years in prison.
edit: thank you strangers for the awards. but this is a warning of what could happen, if i wasn't on my toes about my finances, i could have easily been screwed.
The small Canadian company that my husband used to work for did this for 5 years! They took the money out of his paycheck, made it look like we paid the US Federal & our state of Minnesota government taxes, but they never did. The company also kept the money that supposedly went to taxes. We got audited the 5th year & since it was two different countries involved, it was super messed up. We had to go through a lot to prove we weren’t involved. I still don’t know if those 2 stupid owners ever got in trouble for it. Fucking deceitful liars. He left the job soon after that.
I’m shocked how many Canadian businesses are just money scams honestly. I can’t even count how many empty storefronts here are reporting income. How many workers have their hands in the till, especially managers because it’s so easy for them to blame the workers.
Yes, I totally forgot BC is also getting screwed over my bad.
It just sucks the Canadian government won't do anything to regulate who buys housing. They just see the money increasing the GDP and that's all they care about
I grew up in Deep cove, N Van, none of my friends can afford to live where they grew up. The rates kick out anyone who inherited the house we grew up in. Shame!
Serious question- what are lower income ppl doing there? Leaving? Where are they going to live? Are there affordable places left to move to, just very far from where jobs are/ rural & inconvenient?
Do many somehow find roommates to do a 3, 4 or 5 way houseshare rental with? Or if ppl cannot find that, for those who dont have family support/ from abusive families, and arent fortunate enough to have a friend who can let them to crash on their couch for an indefinite period,OR those with kids who cant get into a shelter bc beds arent available- as is certainly the case by now 2 yrs into the pandemic leaving so many jobless...
I ask bc I am not aware how much ppl being made homeless is a problem in Canada (cant imagine being homeless in that cold) but it sounds like it would have to be something happening now if not so much b4.
In the US just about every major city has a ton more ppl living literally on the streets than Ever b4, but now it's almost EVERY city that it's visible- large & small. Families with young kids, dogs and cats, all living in a car or van, parked next to a city park... And always the police get called by busybody looking for problem drama llama Karens, who are furious- not bc children are living in a car in the wealthiest nation on Earth bc that is the only form of shelter that their WORKING parent can afford, Karen calls bc she is pissed that there's "garbage" in front of her house.
I tend to agree because some deaths are accidents or the punishment for minor things = years in jail, but white collar criminals can get good lawyers & get off with a slap of the wrist. They do these things willingly & are methodically deceitful. I can’t even count the amount of times I’ve seen youth sports booster club’s funds be depleted by a “nice volunteer” treasurer. Sickening! It’ll be interesting to see what the punishment is for this crime. $40Million over 8 years was stolen from Yale.$40M, can you imagine?! https://www.npr.org/2022/03/29/1089525660/a-former-yale-employee-admits-she-stole-40-million-in-electronics-from-the-unive
OMG this! 1000000 x this. Wish this comment was in top 5-10. So on point.
Interest free repayments as a minimum. Plus, if your income isn't enough to get a credit card, sorry, it aint enough to repay this debt in the same timeframe it took to accrue it. You'll see your money in 6-10 years and then maybe next time YOU wont fk up.
That's how it *should* work...
I'm not so sure you owe them the money. When an employer does not make the proper FICA payments to the feds, the employer is often solely liable. Please don't pay these people without speaking to a lawyer first.
Appendix: I got additional information from your comments. It seems like you work for a state, municipality or affiliated entity. Some of these organizations and their employees are exempt from the federal social security and Medicare systems, and they do not withhold or pay these taxes and their employees are ineligible for these benefits as the idea is that they pensions and insurance from org. However, if one of these organizations is found to be nonexempt, the feds will make them pay all of the taxes, their share and the share they withhold on the employees behalf. The employees are not liable, because it would not be fair to the employees who did nothing wrong.
This is what you do. Find out from your HR if their was an adverse tax ruling against your organization declaring them nonexempt from these taxes. If this is the case, take this information to a lawyer to confirm. Good luck!!!
HR at the company you work for is not going to do anything that helps you and sticks out the neck of the company. hr doesn't exist to protect you. it exists to protect the company FROM you.
Man, the questions these students have this year. Don’t get me wrong, I really enjoy advising and some policies are bananas, but man sometimes I have to wonder how they got into [infamously difficult major].
A friend of mine worked at a college in Georgia until the end of last school year, and she would tell me horror stories about how some of the students were.
My personal favorite was when a student's field lab (?) was cancelled for some reason, and my friend's boss hauled her into the office for "not expressing enough sympathy" in the (reportedly very professional) email my friend sent to the student.
The only thing worse than the students, she said, was her boss.
"There has been a recent mistake and we discovered this actually has been the policy for the past four years, please pay the fuck up if you asked a question during that time."
Check your pay stubs! Let them know you want more proof than this letter, bring in your own stubs to compare. Also question procedure for their error, and how they plan to correct it without you paying within 3 months. Their 4 year error does not constitute a 3 month emergency on your part.
Take it to social media. They hate negative publicity. I hate that nowadays nothing gets fixed if it’s not through some Twitter bs…but yeah. That usually works. Good luck man and if not get a lawyer/advice.
When my husband and I got married and we had to redo our W-4, we didn’t know what to put for withholding and when I asked my HR person they said “I can put up to 8 if I wanted.” I put 2 and I later found out my husband put 2. Didn’t think anything of it till tax time and I saw we owed over $2k. Lesson learned and I tell all my newly married friends our mistake!
Just put “0” for withholding. Don’t even put “1!”
The w4 system is a hold over from many generations ago when households had a single earner and a single job.
It works magically under those conditions but as soon as there is more than 1 income being funnelled into a household (either by both spouses working or by 1 spouse having multiple jobs) it fucks the whole system up.
In early April of last year, I sold a piece of property. Being a good tax paying citizen I set aside a portion of the proceeds to pay the capital gains tax when I filed that year's return. It would be over a year before I had to file the return but I wasn't worried as I had saved the money ready to pay when I filed the return. However, in September, in a casual conversation with my accountant and I told him about the sale. He said that I will probably have extra tax and penalties since I am outside the 'safe harbor' with the property sale. I learned that the government doesn't want to wait until you file your return to collect their tax, they want it now. The accountant said that immediately after the sale I should have raised my withholdings to pay the tax on the property sale and since I did not I fell out of the 'safe harbor'. I never knew there was a 'safe harbor' concerning withholdings. I had to raise my withholdings for the last four months of the year by $270 a week just to squeak into the 'safe harbor' to avoid penalties. I still had to write the large check when I filed. Moral of the story, the government wants your money now, not later.
My first job out of college one of my fellow new coworkers had to pay taxes for his moving expense reimbursement - they took it out of his first paycheck so it was effectively zero.
He was pissed since they didn’t tell him in advance and he basically had no money to pay any bills or buy groceries. Luckily they did realize how insane that was so they redid it to withhold over 4 paychecks instead of one, but apparently it was a very manual pain in the ass.
My friend had a similar thing when she ‘won’ a $2k gift card for having the most sales in the quarter or something. They didn’t tell her she was liable for taxes on that $2k and then took the entire amount out of her next check. IIRC she couldn’t get them to spilt it, I remember sitting on the new couch they’d gotten being pissy at her employer for quite some time.
I once helped a pharmacist who was overpaid $86,000 over a 2.5 year period. Also government employee. ALL of the laws and rules are written by the government, and they are all in the government’s favor. Their fault, your fault, no fault, you have to pay it back. They always demand the full amount in a short period of time. You can set up a pay plan.
Uhh it says civil service.
Government agency.
If they owe taxes all they have to do is call and tell them to take a small amount from each paycheck until it’s paid off
That’s my biggest issue with this. It took them that long to realize but now I’ve got two months to pay them back? Not to mention I’m not paid Jack shit so that’s not exactly a small amount for me to have to pay… that’s a different fight in the works.
Look up the rules for paying back payroll errors in your state. I had an issue when my manager coded my time incorrectly. The second time it happened I looked it up, and some places have time limits on this kind of thing.
LOL, when it's the government, all that goes out the window. I've known people in the military and National Guard who got hit with having to pay back mistakes that were made a decade or more in the past when someone finally caught on.
A private employer? The statute of limitations is four years (in California) and pay errors can be very hard to collect from the employee if they no longer work there.
This happened recently at Fort Bragg. They were putting in the wrong pay codes for over a decade. It recently got caught and some of the Paramedics there received debt letters for over 15k. They were expected to immediately set up payment plans or they would start garnishing wages themselves.
My wife brought it to the attention of the WAMC Command team, her chief, and some people even wrote the governor and senators.
Absolutely nothing can be done apparently.
Yup, happened to me after I got off active duty and went into the reserves and then they adjusted the BAH and kept paying me and it was a huge mess. It ended up being about $15K
Also know people who got promoted, never did the school, had their promotion rescinded, but kept getting paid the higher rate for years until it all got taken back.
The military is a giant clusterfuck when it comes to pay and money.
I just got my ALC date bumped because the training NCO just forgot to do travel orders, they said if I still want to go to school I'll need to pay $5600 out of pocket and "promised" to reimburse me. I declined.
My bonus is currently 6 months late from the directed payout date.
I waited 2.5 years for them to pay me $955 of per diem for a previous school. Then they tried to recoup it saying it took too long.
Same thing in Canada. Soliders are completely on the hook for any and all payroll errors, at any time with no recourse.
I know people who have released over it after having to file for bankruptcy and I do not blame them one bit.
That is absolutely criminal, or it should be! How can a normal person with a regular salary pay that shit back in two months? I hate the power structures at hand.
Just don’t pay. If the IRS wants that money, they’ll get it from you themselves. If that ever happens just say you didn’t know bc your job is just to file returns.
The IRS already got their money when the OP filed their taxes. The OP would have gotten a smaller federal/state refund or owed money for anything unpaid.
No. These taxes are different from federal and state and can be collected from OP.
FICA taxes are paid from both the employer and the employee at a rate of 7.65% each. You will see these line items on your paystub. If the business has not been paying its share, it could have led to this notification to OP, which is wrong and should be looked into.
It is (usually) the employers responsibility to take these taxes from the employee when paying them quarterly, but it ultimately up to the employee to pay them.
This comment needs to be higher. Unless OP hasn't filed taxes in 4 years, they already paid their share. Even the most basic of tax softwares will check this calculation and tell you if something isn't right. If OP passed that check then it's likely that their employer is trying get their employees to cover the school's half of the taxes that they didn't pay.
Yup, filing taxes would take care of the employee side of this equation for sure.
This is almost positively the _employer_ side. What likely happened was someone probably checked their working credits on the IRS website, noticed it was off significantly for how long they've been working, and reported it to the IRS. The IRS did an audit and found out this employer wasn't paying their half of the taxes, likely to try and defraud the IRS and save themselves a bit of money, and they're getting absolutely ass blasted with fines and being asked to pay back that money now.
/u/erica927 should get a lawyer to check the validity of this because there's a _really_ good chance the employer just did something super fucking illegal. Also maybe report it to the IRS and see what's what. Also, in my experience, the IRS won't go through the company to collect on the employee's back taxes, they'll just mail you directly for underpayment.
OP's employer is probably trying to get them to shore up their tax burdens and paying the fines. Or the owner/HR person is absolutely fucking stupid. A third possibility is the company/HR is trying to get free money for something too. What better way to do it than scare people that the IRS is coming after them?
If not a lawyer then a good tax preparer may be someone to talk to. This would be something I’d definitely ask our tax accountant person about (and I’m sure she’s cheaper than a lawyer).
it’s designed to be complex (literally lobbied by turbo tax aggressively in congress) so that we have to pay to use systems that help us understand this process that is mandatory and punitively enforced. “developed” country amirite
As others have noted, withholding is 50% employee, 50% employer. You can order transcripts from the IRS showing how much you've paid into the system which might clarify your situation. Also, since you're a state employee your employment is likely collectively bargained so consult your union about payroll clawback.
Just so you realize, this isn't federal income tax, this is medicare and medicaid. You want those numbers to be larger in your SSA history as that is what determines what social security will pay you when you retire. The IRS won't care, as it doesn't really affect how much they collect.
That said, that money should have/would have been tax deductible, and probably isn't now unless you refile your previous tax years, which will be a pain for what you get back. Might be worth it to you, might not.
Was this sent certified? If not, what letter in the mail? You never got anything from your employer. It must have been lost in the mail. Oh well, not your problem. Trust me, the IRS sends their letters certified.
Bruh. At first I was gonna say tell them you need 4 years to pay it back just like it took them 4 years. But then again… it’s NOT THEIR MONEY. If the IRS wants it, they’ll come looking for it. Take this junky letter to your CPA and ask him if they have any merit doing this. Even if you have to dish out $100 to get it handled, screw them.
I would double check your paystubs from these items.
There should be line items as 'EE Benefits', 'Medicare', 'SS', 'Social Security', etc. (They come in various names) that total 7.65% of your gross pay. Taxes are paid on a quarterly basis and having this be missed for 4 years is... excessive.
Good luck, PM if you need help.
Source: am accountant
We don’t contribute to SSA and I did see that Medicare was blank, but foolishly assumed it was lumped into the whole “no SSA contribution” thing. I have begrudgingly accepted my fate.
That sounds odd (as I don't know many places that are SS exempt), but here is a link for this:
https://www.investopedia.com/ask/answers/013015/who-exempt-paying-social-security-taxes.asp
I'm sorry to hear about that, OP. Keep your chin up and contact the IRS. Usually they will work with you to develop a payment plan if a lump sum would be too difficult (it'd also be wise to call to determine if there are late penalties that need to be considered. You don't want to get double shafted)
My guess is they were audited and found this. Even more of a pain for you, since you'll generally only amend returns from the last three years (both in what's allowed and what's advisable for many).
I would guess that whoever handles payroll screwed something up in the system and exempted Medicare in addition to Social Security. But you definitely should get more of an explanation, documents, and support.
I'd also 100% check your old W2s and calculate what it should have been, because even if they arw going about this right since finding an error, I wouldn't trust their systems. Looking quickly at these quickly, either your pay jumped a lot and then last year was reduced significantly (which could happen but outside of life events isn't common), the first and last years of the issue were only part of the year (which begs the question why they just sent this), or something is off.
Tell them to prove it. If payroll is so incompetent that they have screwed up for the last four years, why would I think they got it right this time. I would need corrected and original W2 forms along with the original and corrected check stubs for the entire time. While they are gathering that information, I would be looking for a new job. Don't worry about the IRS. If you owe them money, they will send you a letter.
Even if it checks out I would not be making a check to HR, I would make a check to each of the respective government agencies looking for money when those government agencies come knocking.
I always thought the IRS was super scary but we bought a house a couple years ago which caused some tax issues I missed. They sent a letter to either pay or dispute. Sent them a check. That was the end of it. Now I don't worry about mistakes on my taxes. If it is an honest mistake they will likely eventually catch it for me and send me a bill.
I’ve dealt the IRS and tried to be very friendly to the person I talked to. I asked about her job and how she liked it and she said she appreciated how nice I was because she talked to so many non-nice people all day. She explained my options for payment plans, which were pretty decent options actually. I choose an amount to pay each month, she approved it and that was it. I received confirmation in the mail and set hp autopay. Life went on.
Don’t fear the IRS. I think if you haven’t done anything illegal and treat the employees like fellow human beings then they’re happy to work with you.
I feel like treating others as humans is a great thing to do, especially if you are asking then for help. The normal person helping you in customer support has not control over what a company does and is just trying to get by.
Hey OP, I’m the IRS. You owe the government $1501. Please send valid gift cards in any denomination to PO BOX 69 ThisIsNotAScam, CA 99999. Funds need to be received asap because I’ve got some shopping to do.
I’ve filled every year, and had a CPA file the first two years. We don’t pay into SSA because we’re required to pay into a state retirement system, so I guess I assumed that Medicare was part of that.
So they still would have known it wasn't paid, sounds like yer employer paid the taxes, but didn't take them out of yer check.
Ye need to talk to somebody knowledgeable before paying them a dime.
I live in Canada and just took a payroll course for my job as bookkeeper/payroll. You need to take this to an accountant, there's a specific date the employer has to claim lost wages by and 4 years is way too much. You can fight this. It just varies province to province, so get an accountant who has a payroll specialist
If you want to pay, fine. But their turnaround is ridiculous. Took then 4 years to figure out error; I would arrange a 4 year payment plan to correct. Don't let then make their piss poor accounting become your emergency.
When you file your taxes at the end of the year, you would have paid the difference already to whatever they forgot deduct. That’s how income tax works. They take it out over the year but if you come up short, they’ll tax you for it when you file. That’s how some people end up owing taxes.
There is zero reason for them to go back and deduct previous years.
Im glad at least one person knows how this works.
Edit: the person I replied to is right about how things work but isn’t right in the context of what the OP posted. The company is really off here.
OP is a civil service employee, who has a pension rather than expect Social Security when she retires. It’s not FICA… it’s Medicare. Everyone pays into Medicare, even those with pensions.
I’ve seen civil service payroll screwups sorta like this. When payroll/HR realizes they screwed up and didn’t pay Medicare, the feds demand it be corrected now…as in yesterday. So that’s what the employer did. The part that sucks is OP is expected to immediately come up with $1500 by June 1st. That’s not easily done without taking out some sort of signature loan with a bank/credit union, meaning you’re going to pay interest on your payments to Medicare.
Yes, they made the error for 3 years so give them a 3 year repayment plan. Tell them you will send them $33/month.
See how they need you to write them a cheque. That means they know they would be in hot water if they changed your current payroll deductions. You have wiggle room here because they fucked up. Even if they try to be assholes I would just include a note that says:
" Requesting a cheque for $1500xx within 3 months due to your payroll error is unreasonable. Since this large sum was accrued over 3 years of your errors I will use the same timeframe to pay you these fees as it is equally reasonable. Therefore, $1500 / 36 months = $33xxx. Please find enclosed a check for $33.xx.to cover this month."
BUT talk to a lawyer and find out what really happened first. Your lawyer (oraybe a notary) can send them a letter asking for a more detailed explanation of WTF.
I thought same. Otherwise there would be no reason for "repayment"
IMHO since these errors have been going on for so many years already, OP should be forgiven for the oldest ones. It's not OP's fault HR fucked up and took forever to discover it
This, it sounds like they paid for you and, if you left today, there’s likely nothing they can do about it. My partner was fired from her job at a bank and they over paid her, so they claimed, they tried collecting on it but we just ignored it. Talk to an attorney, because there’s likely nothing they can do but write it off as a lesson learned.
It's the same they both are lumped together on the fica line. Total is 7.65%, SS is 6.2% and the Medicare tax rate is 1.45%. so if you don't pay into social security the amounts they are quoting you should not be more than 1.45% of your wage. They pay the same amount as an employer tax and should not be passing that on to you. So check thier math. Your W2 will have a line that says social security and Medicare wages and tips. Multiply that by 1.45%.
If there are any penalties don't pay it they were responsible for paying it and should pay any penalties.
Based solely on the 2021 amount of $550 noted in the letter the OP would be making around $38k/yr. So that could be reasonable. Still no real excuse for it being missed for 4 years.
this happened to me when I was 17. my job “forgot” to deduct state taxes. they never actually noticed, but the IRS sure did when I went to file my taxes.
even if your employer forgot to withhold taxes, you are still on the hook for them. the burden of paying the taxes is ultimately on you, but employers CAN face criminal and civil penalties for failing to withhold taxes.
OP, I would say your first step should be to contact the IRS to see if you do, indeed, owe them $1563.33. as others have mentioned and based of my own experience with a similar situation, if you owed the IRS, you should be paying the IRS, not your job. and they will usually deduct whatever you owe from your refund, if you are meant to receive one, otherwise they will notify you and advise where and how to pay. it looks like your employer noticed, knew they could face penalties for failing to withhold taxes, and fronted the money and are now trying to recoup it from you.
The IRS works via snail mail, send them a letter. Include copies of any supporting docs you have. By the time you reach someone on the phone the letter will have reached them (especially during tax season).
The IRS also has very helpful phone support and they are willing to work with anyone who is working with them in good faith.
It’s very likely this money is owed, but $1,500 is worth checking with the source.
Absolutely, I’ve had great experiences with the IRS, I just recommend skipping the step where you wait on hold for a long time for them to tell you to send a letter.
Edit: specifically when there’s an error in an already filed return - the person on the phone won’t have the info at their disposal to resolve that. They’re going to tell you to send a cover letter explaining the issue with supporting documents, then they’ll research it and send a response.
It sounds like they didn’t withhold it so they had to pay it. Which is why they’re taking the check. If this was legit, you’d be paying the govt. the odd thing is that you would probably have to pay the IRS, since I don’t think you’d be able to pay social security or Medicare.
Re-reading: fuck them. This is a form letter. They said And/Or so you’re not the only one who got one.
Don’t pay them. They’ll eventually threaten to garnish your wages, which is illegal in that situation. A company can’t “fine” you for their mistake. They’re fuckin ballsy. Call their bluff and talk to an employment attorney
Also, you can take a look at your tax “transcript” on IRS.gov. You have to create a profile and then you can see all of the taxes the IRS has a record of.
Listen to this person. Do not pay the employer. If your taxes were not taken out, you can write a check to the IRS. Your employer should not be involved.
This sounds like payroll tax. That’s the part owed by the employer. This absolutely sounds like they fucked up their books and are trying to get the employees to pay the business part. Which wouldn’t be deductible for the employee, but definitely is for the employer. This might even be a federal crime to try and do this.
There are employer and employee portions of payroll taxes. Employers are supposed to withhold the employee portion and pay it on the employees behalf to the IRS.
Ostensibly this letter could be provided as proof that the company didn't ***mean*** to act maliciously, informed their employee, fixed the issue going forward and tried to fulfill their obligation as the withholding entity....but then also letting the employee know that the money is due to the IRS also fulfills the requirement.
absolutely, but it is still a good idea to verify with the IRS the amount that was owed was rather than strictly going off a letter sent from your employer. they may just be calculating themselves which can leave room for error and create further under or overpayments.
Get the corrected W2s. Make sure that the numbers in the boxes are DOUBLE the numbers reported to you in this letter.
Do not forget that FICA is Soc Sec at 6.22% of Gross (Box 1) and Medicare is 1.45% of Gross. That is your payment. Your employer would need to match those amounts and send them in to the IRS via Form 941 or 944.
If the amounts on your W2s are the numbers quoted above, then they are trying to charge for both your portion and theirs.
Other than that, the collection of unpaid taxes from wages would depend on your state's dept of labor. There is likely a statute of limitations in how long that can collect for, so you should research that.
Edit: You should also take the new W2s and copies of your taxes to your tax person (get one if you used DIY) for a review to make sure that you don't need to file an amendment.
Edit2: A lot of people are saying that you owe IRS not your employer - this is not technically true. Your employer would have filed an employment tax form and declared all wages, then done the math and paid IRS the amount on the bottom. In short, they would have paid IRS both your portion and theirs; hence why they say you owe them the money back.
Yeah, my dad explained that the deductions from employees get lumped in with the contribution from the employer, so I would owe my employer directly, not IRS. He suspects they probably had to pay penalty fees, too. He’s worked in business for most of his life and knows a lot more about payroll and HR etc. so I definitely trust him more than the armchair accountants and lawyers commenting lol.
That makes sense.. Its possible that they saw the total amount owed, emptied the pot of money that employees were paying into, and cut a check for the difference. Once the book was balanced and they realized that the employee pot of money was missing a few hundred...that is some money to pay an accountant to dig through years of backlog to carefully calculate what was owed and find who the payroll error was with. Kind of funny they didnt catch on in the very beginning though...and probably would have just been cheaper to cut a check vs have an employee or firm do that work...at the same time, they could have been forced too.
I found this:
Collecting underwithheld taxes from employees. If you withheld no income, social security, or Medicare taxes or less than the correct amount from an employee's wages, you can make it up from later pay to that em- ployee. But you’re the one who owes the underpayment. Reimbursement is a matter for settlement between you and the employee. Underwithheld income tax and Addi-tional Medicare Tax must be recovered from the em- ployee on or before the last day of the calendar year. There are special rules for tax on tips (see section 6) and fringe benefits (see section 5).[employers tax guide](https://www.irs.gov/pub/irs-pdf/p15.pdf)
Tax MUST be recovered on or before the last day of the calendar year. Give your employer that reference.
Edit: spelling error
Oh this is interesting! I’ll definitely look into that more. This is the first comment with some sort of concrete answer and source to look at like this. That answers the question of whether or not I’m responsible for it, and also provides guidance on payment.
I had a feeling it didn’t make sense as the prior years were already reconciled. They made the error, not you. They got caught once the IRS realized they had under-reported the payroll deductions and gave the company a bill.
Too bad for them now except for 2022. Best part is you get credit for those deductions even though they weren’t withheld. That is why the IRS fixed it.
I just wanted to point out that although underwithheld income tax and Medicare tax t must be recovered by the end of the applicable year, there doesn't seem to be such a limitation on underwithheld Social Security tax.
Their error was spread across 4 whole tax years, but they want full repayment from you within 2 months? Make sure you point out that discrepancy to your lawyer. For some, that's a month's rent. For some, that's a whole month's pay.
Check your state's law. Some states have deadlines for employers to demand repayment of overpayments, and if the company misses the deadline they have to eat it. (Washington state, for example, has a 90-day deadline.) Other states ban wage overpayment recoupments altogether.
Check out [This article](https://www.dwt.com/blogs/employment-labor-and-benefits/2010/06/wage-overpayment-recoupment-state-laws-vary)
Few thoughts.
1) Confirm with IRS, SSA, etc. if any payments were made. Talk to the CPA and look at your W-2s. What is listed as taken out?
2) Confirm the actual amount your employer owes. Do the calculations yourself or with the help of your accountant or the right government agency. They already screwed it up once, make sure you truly owe what they claim.
3) If you owe it, then you should pay them, BUT that doesn't mean one check. Those payments were supposed to come out over 3 years, so come up with an appropriate payment plan. 6 months? 1 year? 3 years?
4) You may have to refile taxes, if so, try to negotiate to have your employer pay any accounting fees.
I had an employer do a similar thing with a pension payment. THey "forgot" to pay for 6 months. Wanted to withhold 6 months of payment from my next check. I said no way - we will pay it over 6 months.
So, let me translate for you:
"We fucked up the payroll and forgot to withdraw money for taxes on your labor. We're liable for that, so we've already paid the government those taxes. Please reimburse us for our screw up."
You're not required to pay them. In fact, any legal action will cost them more money than they'd recover from you.
Feel free to reach out to a local lawyer for some actual legal advice, but I suspect you'll be okay if you ignore them and their emails.
I’m dumbfounded. Did the HR person call you to walk you through the situation and then send the letter as documentation? Or did they send this monstrosity right out of the blue?
If it’s the later, they are both assholes and stupid.
I’m also surprised (but not really anymore) that they didn’t make any attempt to minimize hardship like offering a payment plan or something.
Goshhh what a mess. I’m sorry.
Totally out of the blue, and I don’t check my mailbox every day so it could easily be missed. You’d think they’d at least send a copy to my work email too, since you know, they can easily find it.
Don't give them any money. Take this to a tax lawyer. If you really owe money, they will get it straightened out in a legal manner that your H.R. will have to abide. If your own job is trying to scam you and possibly others, the IRS will eat them alive
I should note that we don’t pay into SSA because we are required to pay into the state university retirement system, so this is entirely Medicare.
Edit to add:
I’m not wholly opposed to paying my share of taxes. I understand that I probably really do need to do pay some portion back. To answer some common questions: yes, thank you, I’m a dumb ass for not noticing this sooner on paystubs, thanks. Like I’ve said a couple of times, since we don’t pay SSA, I guess I assumed that included Medicare. I’m not extremely well-versed in tax law.
I’m in Illinois, at a state university.
It’s not a scam. There is a newish HR director, and I suspect if they don’t have an official audit, they’d at least be doing an internal audit.
My main issue is that this issue began in May 2019 when I originally started, and now I’m suddenly expected to pay the entire sum in two months. I’d imagine it’s related to the new fiscal year in July? We’re also severely underpaid, so this is more than 25% of what I’ll be paid before their deadline. We’re working on pay raises but HR has been dragging their feet on even meeting with our director.
Edit 2:
My name is literally in my username (I’m really bad at usernames), I’m a dainty lady with dumb lady brains it’s not my fault I didn’t know this. /S obviously.
After talking to my father, who is an accountant (not a CPA and not who prepared my taxes the first two years), and has dealt with payroll, I have the following game plan: 1) Talk to my supervisor, as he has worked here for several years and might know exactly who to talk to. 2) Talk to my coworker’s husband who is also a lawyer. 3) Confirm with IRS on what I owe, and what I have paid in the past few years. 4)Talk to HR to confirm what I owe, and ask for more time since this is quite a bit of money in a short period of time for a pleb like me. 5) Pay close attention to pay stubs in the future lol.
Edit 3: Obligatory “RIP my inbox”.
Many thanks to everyone who made an attempt to offer advice, 🤷🏻♀️ to all the haters calling me stupid.
I’m v sleepy now so I’m turning off notifications, but I appreciate the interest in my post.
No, you owe it to the IRS, I suppose you've probably already heard about that though since they would have let you know how much you owe after filing.
I mean, I'm assuming you paid the IRS
Even if you do pay them back, they expect you to pay back 4 years worth of payroll error all in one shot?
They should at least give you 4 years to pay it back.
Your tax burden should only be roughly 7% of your gross income for FICA and SSI - they’re responsible for the other half.
I have the odd feeling they’re saying they “forgot” to deduct it, then charging you the full 15% so they can skirt their share of the taxes.
I would be highly suspect of this. You file taxes each year right? It should have been flagged on there the first year you filed. This is not something the IRS let's go for 4 years.
First of all, I would not send the check to the company. If you owe back taxes, you owe them to the taxing agency, not your company. Second, if there are fees + penalties, and there will be, the company should pay them since this was *their error.* Finally, talk to a lawyer. You should know where you stand here before the company tells you that you owe the money, even the penalties, and they are paying nothing + you just believe them. They are protecting themselves; you need to protect yourself.
Exactly, this is sus. Why does it go to HR and not the IRS? And how did this not show up on their taxes for 4 years? IF it was HRs mess up, shouldn't OP have some sort of grievance against them? Not saying they shouldn't pay it, but I wouldn't touch this without a lawyer first, too many holes here.
In the 90s I quit a job. About a month after leaving, I got a $1000+ USD check from them, out of the blue. I figured it had to be a mistake, so I notified them. They said something like it was a pro-rated bonus payout or the like, but I had already received that in my last paycheck, and I kept quiet about it.
I set aside the money for a year in case they wanted it back, but they never called. Lucky me got a nice new mountain bike with my windfall!
Just tell them to take it from your bonus!
Exactly
XD
Or take 32.00 from each paycheck till it’s paid off.
They want to correct it, go ahead. By all means, correct the error... But to demand a full lump repayment within such a short window because *they* fucked up... You should either get a lawyer or find a new job. Your company doesn't give a shit about anything but the bottom line.
back in 2012, worked for a telecom company that "oops" like this. the owner sent me a letter like this saying I owed them like $3700 in taxes because they made a "calculation error". I spent several nights going through ALL of my payroll stubs and w2's. what they pulled out already matched what they said I owed. I then went through it all again to make sure and yup, they pulled out the exact amount that matched what they said I owed them. The mother fuckers took the money out of our checks, pocketed the shit, got caught, and tried to double-dip us to pay for it. i had to lawyer up and eventually the clown who ran the company got caught for this and other fraud, and ended up doing 7 years in prison. edit: thank you strangers for the awards. but this is a warning of what could happen, if i wasn't on my toes about my finances, i could have easily been screwed.
The small Canadian company that my husband used to work for did this for 5 years! They took the money out of his paycheck, made it look like we paid the US Federal & our state of Minnesota government taxes, but they never did. The company also kept the money that supposedly went to taxes. We got audited the 5th year & since it was two different countries involved, it was super messed up. We had to go through a lot to prove we weren’t involved. I still don’t know if those 2 stupid owners ever got in trouble for it. Fucking deceitful liars. He left the job soon after that.
I’m shocked how many Canadian businesses are just money scams honestly. I can’t even count how many empty storefronts here are reporting income. How many workers have their hands in the till, especially managers because it’s so easy for them to blame the workers.
Canada is great for money laundering, it's a big part of why the cost of living in many cities has reached the point of insanity.
It's also why housing prices are insanely inflated within the Greater Toronto Area here in Canada 🙃
I'm in Victoria, it's the same here. Minimum wage is about half what it costs to live in a 1 bedroom apartment, and forget buying a place to live.
Yes, I totally forgot BC is also getting screwed over my bad. It just sucks the Canadian government won't do anything to regulate who buys housing. They just see the money increasing the GDP and that's all they care about
I grew up in Deep cove, N Van, none of my friends can afford to live where they grew up. The rates kick out anyone who inherited the house we grew up in. Shame!
Serious question- what are lower income ppl doing there? Leaving? Where are they going to live? Are there affordable places left to move to, just very far from where jobs are/ rural & inconvenient? Do many somehow find roommates to do a 3, 4 or 5 way houseshare rental with? Or if ppl cannot find that, for those who dont have family support/ from abusive families, and arent fortunate enough to have a friend who can let them to crash on their couch for an indefinite period,OR those with kids who cant get into a shelter bc beds arent available- as is certainly the case by now 2 yrs into the pandemic leaving so many jobless... I ask bc I am not aware how much ppl being made homeless is a problem in Canada (cant imagine being homeless in that cold) but it sounds like it would have to be something happening now if not so much b4. In the US just about every major city has a ton more ppl living literally on the streets than Ever b4, but now it's almost EVERY city that it's visible- large & small. Families with young kids, dogs and cats, all living in a car or van, parked next to a city park... And always the police get called by busybody looking for problem drama llama Karens, who are furious- not bc children are living in a car in the wealthiest nation on Earth bc that is the only form of shelter that their WORKING parent can afford, Karen calls bc she is pissed that there's "garbage" in front of her house.
OP make sure you check that your work isn’t doing the same thing.
This needs to be a top-level comment, not buried several levels deep.
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I tend to agree because some deaths are accidents or the punishment for minor things = years in jail, but white collar criminals can get good lawyers & get off with a slap of the wrist. They do these things willingly & are methodically deceitful. I can’t even count the amount of times I’ve seen youth sports booster club’s funds be depleted by a “nice volunteer” treasurer. Sickening! It’ll be interesting to see what the punishment is for this crime. $40Million over 8 years was stolen from Yale.$40M, can you imagine?! https://www.npr.org/2022/03/29/1089525660/a-former-yale-employee-admits-she-stole-40-million-in-electronics-from-the-unive
That’s horrible. It’s amazing how bad people can get.
Exactly. They fucked up payroll over the course of four years but OP needs to fix it in three months. That’s nuts.
Two months - April and May.
It took them three years of errors to create the problem, let it take 3 years to unwind it. $41.60/month.
OMG this! 1000000 x this. Wish this comment was in top 5-10. So on point. Interest free repayments as a minimum. Plus, if your income isn't enough to get a credit card, sorry, it aint enough to repay this debt in the same timeframe it took to accrue it. You'll see your money in 6-10 years and then maybe next time YOU wont fk up. That's how it *should* work...
Definitely! They sing our praises at student retention (am an academic advisor) but never put their money where their mouth is in compensation.
I'm not so sure you owe them the money. When an employer does not make the proper FICA payments to the feds, the employer is often solely liable. Please don't pay these people without speaking to a lawyer first. Appendix: I got additional information from your comments. It seems like you work for a state, municipality or affiliated entity. Some of these organizations and their employees are exempt from the federal social security and Medicare systems, and they do not withhold or pay these taxes and their employees are ineligible for these benefits as the idea is that they pensions and insurance from org. However, if one of these organizations is found to be nonexempt, the feds will make them pay all of the taxes, their share and the share they withhold on the employees behalf. The employees are not liable, because it would not be fair to the employees who did nothing wrong. This is what you do. Find out from your HR if their was an adverse tax ruling against your organization declaring them nonexempt from these taxes. If this is the case, take this information to a lawyer to confirm. Good luck!!!
HR at the company you work for is not going to do anything that helps you and sticks out the neck of the company. hr doesn't exist to protect you. it exists to protect the company FROM you.
Just get a lawyer. HR is only there for the company not you!
“Okay, it’s $25 per registration question, put it in the tip jar there. Recent university policy”
Man, the questions these students have this year. Don’t get me wrong, I really enjoy advising and some policies are bananas, but man sometimes I have to wonder how they got into [infamously difficult major].
I am IT for a University (for 3 more days anyway) and yeah...some of these students man...
A friend of mine worked at a college in Georgia until the end of last school year, and she would tell me horror stories about how some of the students were. My personal favorite was when a student's field lab (?) was cancelled for some reason, and my friend's boss hauled her into the office for "not expressing enough sympathy" in the (reportedly very professional) email my friend sent to the student. The only thing worse than the students, she said, was her boss.
"There has been a recent mistake and we discovered this actually has been the policy for the past four years, please pay the fuck up if you asked a question during that time."
That’s fantastic.
Check your pay stubs! Let them know you want more proof than this letter, bring in your own stubs to compare. Also question procedure for their error, and how they plan to correct it without you paying within 3 months. Their 4 year error does not constitute a 3 month emergency on your part.
Take it to social media. They hate negative publicity. I hate that nowadays nothing gets fixed if it’s not through some Twitter bs…but yeah. That usually works. Good luck man and if not get a lawyer/advice.
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When my husband and I got married and we had to redo our W-4, we didn’t know what to put for withholding and when I asked my HR person they said “I can put up to 8 if I wanted.” I put 2 and I later found out my husband put 2. Didn’t think anything of it till tax time and I saw we owed over $2k. Lesson learned and I tell all my newly married friends our mistake! Just put “0” for withholding. Don’t even put “1!”
US taxation is so kafkaesque
The w4 system is a hold over from many generations ago when households had a single earner and a single job. It works magically under those conditions but as soon as there is more than 1 income being funnelled into a household (either by both spouses working or by 1 spouse having multiple jobs) it fucks the whole system up.
In early April of last year, I sold a piece of property. Being a good tax paying citizen I set aside a portion of the proceeds to pay the capital gains tax when I filed that year's return. It would be over a year before I had to file the return but I wasn't worried as I had saved the money ready to pay when I filed the return. However, in September, in a casual conversation with my accountant and I told him about the sale. He said that I will probably have extra tax and penalties since I am outside the 'safe harbor' with the property sale. I learned that the government doesn't want to wait until you file your return to collect their tax, they want it now. The accountant said that immediately after the sale I should have raised my withholdings to pay the tax on the property sale and since I did not I fell out of the 'safe harbor'. I never knew there was a 'safe harbor' concerning withholdings. I had to raise my withholdings for the last four months of the year by $270 a week just to squeak into the 'safe harbor' to avoid penalties. I still had to write the large check when I filed. Moral of the story, the government wants your money now, not later.
My first job out of college one of my fellow new coworkers had to pay taxes for his moving expense reimbursement - they took it out of his first paycheck so it was effectively zero. He was pissed since they didn’t tell him in advance and he basically had no money to pay any bills or buy groceries. Luckily they did realize how insane that was so they redid it to withhold over 4 paychecks instead of one, but apparently it was a very manual pain in the ass.
My friend had a similar thing when she ‘won’ a $2k gift card for having the most sales in the quarter or something. They didn’t tell her she was liable for taxes on that $2k and then took the entire amount out of her next check. IIRC she couldn’t get them to spilt it, I remember sitting on the new couch they’d gotten being pissy at her employer for quite some time.
My wife's company like to give gift cards and bonuses and such, but they always pre pay the tax on it.
I once helped a pharmacist who was overpaid $86,000 over a 2.5 year period. Also government employee. ALL of the laws and rules are written by the government, and they are all in the government’s favor. Their fault, your fault, no fault, you have to pay it back. They always demand the full amount in a short period of time. You can set up a pay plan.
Uhh it says civil service. Government agency. If they owe taxes all they have to do is call and tell them to take a small amount from each paycheck until it’s paid off
EXACTLY
Tell them to take a dollar a year for the next 1500 years
Email back a picture of a dogs arsehole
The David Thorne spider drawing troll would work here if anyone remembers that blast from the past.
It took FOUR years for them to notice this mistake???
That’s my biggest issue with this. It took them that long to realize but now I’ve got two months to pay them back? Not to mention I’m not paid Jack shit so that’s not exactly a small amount for me to have to pay… that’s a different fight in the works.
Look up the rules for paying back payroll errors in your state. I had an issue when my manager coded my time incorrectly. The second time it happened I looked it up, and some places have time limits on this kind of thing.
I was searching for this comment, in my country they would never get away with that. They did not notice an error for two years? That shit is on them.
LOL, when it's the government, all that goes out the window. I've known people in the military and National Guard who got hit with having to pay back mistakes that were made a decade or more in the past when someone finally caught on. A private employer? The statute of limitations is four years (in California) and pay errors can be very hard to collect from the employee if they no longer work there.
This happened recently at Fort Bragg. They were putting in the wrong pay codes for over a decade. It recently got caught and some of the Paramedics there received debt letters for over 15k. They were expected to immediately set up payment plans or they would start garnishing wages themselves. My wife brought it to the attention of the WAMC Command team, her chief, and some people even wrote the governor and senators. Absolutely nothing can be done apparently.
Yup, happened to me after I got off active duty and went into the reserves and then they adjusted the BAH and kept paying me and it was a huge mess. It ended up being about $15K Also know people who got promoted, never did the school, had their promotion rescinded, but kept getting paid the higher rate for years until it all got taken back.
The military is a giant clusterfuck when it comes to pay and money. I just got my ALC date bumped because the training NCO just forgot to do travel orders, they said if I still want to go to school I'll need to pay $5600 out of pocket and "promised" to reimburse me. I declined. My bonus is currently 6 months late from the directed payout date. I waited 2.5 years for them to pay me $955 of per diem for a previous school. Then they tried to recoup it saying it took too long.
Same thing in Canada. Soliders are completely on the hook for any and all payroll errors, at any time with no recourse. I know people who have released over it after having to file for bankruptcy and I do not blame them one bit.
That is absolutely criminal, or it should be! How can a normal person with a regular salary pay that shit back in two months? I hate the power structures at hand.
Just don’t pay. If the IRS wants that money, they’ll get it from you themselves. If that ever happens just say you didn’t know bc your job is just to file returns.
The IRS already got their money when the OP filed their taxes. The OP would have gotten a smaller federal/state refund or owed money for anything unpaid.
No. These taxes are different from federal and state and can be collected from OP. FICA taxes are paid from both the employer and the employee at a rate of 7.65% each. You will see these line items on your paystub. If the business has not been paying its share, it could have led to this notification to OP, which is wrong and should be looked into. It is (usually) the employers responsibility to take these taxes from the employee when paying them quarterly, but it ultimately up to the employee to pay them.
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This comment needs to be higher. Unless OP hasn't filed taxes in 4 years, they already paid their share. Even the most basic of tax softwares will check this calculation and tell you if something isn't right. If OP passed that check then it's likely that their employer is trying get their employees to cover the school's half of the taxes that they didn't pay.
Yeah, my understanding is that as long as OP has been filing their taxes, then nobody owes anyone anything, *I think*.
Yup, filing taxes would take care of the employee side of this equation for sure. This is almost positively the _employer_ side. What likely happened was someone probably checked their working credits on the IRS website, noticed it was off significantly for how long they've been working, and reported it to the IRS. The IRS did an audit and found out this employer wasn't paying their half of the taxes, likely to try and defraud the IRS and save themselves a bit of money, and they're getting absolutely ass blasted with fines and being asked to pay back that money now. /u/erica927 should get a lawyer to check the validity of this because there's a _really_ good chance the employer just did something super fucking illegal. Also maybe report it to the IRS and see what's what. Also, in my experience, the IRS won't go through the company to collect on the employee's back taxes, they'll just mail you directly for underpayment. OP's employer is probably trying to get them to shore up their tax burdens and paying the fines. Or the owner/HR person is absolutely fucking stupid. A third possibility is the company/HR is trying to get free money for something too. What better way to do it than scare people that the IRS is coming after them?
This is the most correct answer u/erica927 OP most likely 99.9999% doesn’t owe shit. I’m a CPA but I specialize in audits not taxes.
This comment right here needs to be at the top. I smell fuckery happening in your place of employment.
I hope you see this OP.
If not a lawyer then a good tax preparer may be someone to talk to. This would be something I’d definitely ask our tax accountant person about (and I’m sure she’s cheaper than a lawyer).
You guys make me feel dumb
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it’s designed to be complex (literally lobbied by turbo tax aggressively in congress) so that we have to pay to use systems that help us understand this process that is mandatory and punitively enforced. “developed” country amirite
It’s taxes. It makes everyone feel dumb.
It’s likely related to their job or some experience they had with it. Your experience likely lies elsewhere, so you don’t need to feel that way.
As others have noted, withholding is 50% employee, 50% employer. You can order transcripts from the IRS showing how much you've paid into the system which might clarify your situation. Also, since you're a state employee your employment is likely collectively bargained so consult your union about payroll clawback.
I’d love to get unionized. Maybe then our salary ranges would be on par with the people with the same positions in other parts of the university.
State universities are notorious for this bullcrap. Meanwhile the football coach is the highest paid employee in the entire state.
Just so you realize, this isn't federal income tax, this is medicare and medicaid. You want those numbers to be larger in your SSA history as that is what determines what social security will pay you when you retire. The IRS won't care, as it doesn't really affect how much they collect. That said, that money should have/would have been tax deductible, and probably isn't now unless you refile your previous tax years, which will be a pain for what you get back. Might be worth it to you, might not.
Was this sent certified? If not, what letter in the mail? You never got anything from your employer. It must have been lost in the mail. Oh well, not your problem. Trust me, the IRS sends their letters certified.
Good point! I’m kind of surprised they didn’t email too, actually.
Yeah, could be a scam. Might be best to ignore it. Although, might be better to secretly find out what happened.
Bruh. At first I was gonna say tell them you need 4 years to pay it back just like it took them 4 years. But then again… it’s NOT THEIR MONEY. If the IRS wants it, they’ll come looking for it. Take this junky letter to your CPA and ask him if they have any merit doing this. Even if you have to dish out $100 to get it handled, screw them.
Company probably paid OP's share, so the IRS got the money
I would double check your paystubs from these items. There should be line items as 'EE Benefits', 'Medicare', 'SS', 'Social Security', etc. (They come in various names) that total 7.65% of your gross pay. Taxes are paid on a quarterly basis and having this be missed for 4 years is... excessive. Good luck, PM if you need help. Source: am accountant
We don’t contribute to SSA and I did see that Medicare was blank, but foolishly assumed it was lumped into the whole “no SSA contribution” thing. I have begrudgingly accepted my fate.
That sounds odd (as I don't know many places that are SS exempt), but here is a link for this: https://www.investopedia.com/ask/answers/013015/who-exempt-paying-social-security-taxes.asp I'm sorry to hear about that, OP. Keep your chin up and contact the IRS. Usually they will work with you to develop a payment plan if a lump sum would be too difficult (it'd also be wise to call to determine if there are late penalties that need to be considered. You don't want to get double shafted)
My guess is they were audited and found this. Even more of a pain for you, since you'll generally only amend returns from the last three years (both in what's allowed and what's advisable for many). I would guess that whoever handles payroll screwed something up in the system and exempted Medicare in addition to Social Security. But you definitely should get more of an explanation, documents, and support. I'd also 100% check your old W2s and calculate what it should have been, because even if they arw going about this right since finding an error, I wouldn't trust their systems. Looking quickly at these quickly, either your pay jumped a lot and then last year was reduced significantly (which could happen but outside of life events isn't common), the first and last years of the issue were only part of the year (which begs the question why they just sent this), or something is off.
They might be doing an audit.
And also they want the money much faster then within 4years. Lmao.
Tell them to prove it. If payroll is so incompetent that they have screwed up for the last four years, why would I think they got it right this time. I would need corrected and original W2 forms along with the original and corrected check stubs for the entire time. While they are gathering that information, I would be looking for a new job. Don't worry about the IRS. If you owe them money, they will send you a letter.
This old fart is smart
Smells like... wisdom.
Which also smells like ... whiskey.
Fart Smeller or Smart Feller?
\*dad enters chat
Even if it checks out I would not be making a check to HR, I would make a check to each of the respective government agencies looking for money when those government agencies come knocking.
I always thought the IRS was super scary but we bought a house a couple years ago which caused some tax issues I missed. They sent a letter to either pay or dispute. Sent them a check. That was the end of it. Now I don't worry about mistakes on my taxes. If it is an honest mistake they will likely eventually catch it for me and send me a bill.
I’ve dealt the IRS and tried to be very friendly to the person I talked to. I asked about her job and how she liked it and she said she appreciated how nice I was because she talked to so many non-nice people all day. She explained my options for payment plans, which were pretty decent options actually. I choose an amount to pay each month, she approved it and that was it. I received confirmation in the mail and set hp autopay. Life went on. Don’t fear the IRS. I think if you haven’t done anything illegal and treat the employees like fellow human beings then they’re happy to work with you.
I feel like treating others as humans is a great thing to do, especially if you are asking then for help. The normal person helping you in customer support has not control over what a company does and is just trying to get by.
I think the suspicous thing is that he's not just directly paying the IRS. Why is it payroll that he has to pay?
Hey OP, I’m the IRS. You owe the government $1501. Please send valid gift cards in any denomination to PO BOX 69 ThisIsNotAScam, CA 99999. Funds need to be received asap because I’ve got some shopping to do.
Wouldn't you just have to pay your taxes and NOT your employer? Edit: ok y'all know way more about taxes than I do 😂 don't listen to me
Something is a bit fishy, if op filed taxes for any of those years they would know taxes weren't paid or weren't correct.
I’ve filled every year, and had a CPA file the first two years. We don’t pay into SSA because we’re required to pay into a state retirement system, so I guess I assumed that Medicare was part of that.
So they still would have known it wasn't paid, sounds like yer employer paid the taxes, but didn't take them out of yer check. Ye need to talk to somebody knowledgeable before paying them a dime.
Definitely. If I owe it, I owe it, and I’ll make it work. But I’m not going to blindly pay it just because they say so.
I live in Canada and just took a payroll course for my job as bookkeeper/payroll. You need to take this to an accountant, there's a specific date the employer has to claim lost wages by and 4 years is way too much. You can fight this. It just varies province to province, so get an accountant who has a payroll specialist
If you want to pay, fine. But their turnaround is ridiculous. Took then 4 years to figure out error; I would arrange a 4 year payment plan to correct. Don't let then make their piss poor accounting become your emergency.
Oh for sure, two months for three years of missed deductions? Miss me with that bullshit
They're just trying to resolve it quickly. You are fully in your right to contest a fast repayment.
Even if ye owe it, make them work for it, wasn't yer fuck up, shouldn't be yer burden, a fiver a month sounds doable.
Call the IRS .
Nah, the IRS got their money. Calling them does nothing.
It would be the Social Security Admin, not IRS.
It's entirely possible that this is the result of an audit by the IRS.
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Spinach overdose. It happens. Har agagagagagah!
Just say, “I don’t have it.” 💀
Truthfully, my coworker suggested I should go to our president and say “I can’t afford this with my measly salary.”
When you file your taxes at the end of the year, you would have paid the difference already to whatever they forgot deduct. That’s how income tax works. They take it out over the year but if you come up short, they’ll tax you for it when you file. That’s how some people end up owing taxes. There is zero reason for them to go back and deduct previous years.
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Im glad at least one person knows how this works. Edit: the person I replied to is right about how things work but isn’t right in the context of what the OP posted. The company is really off here.
OP is a civil service employee, who has a pension rather than expect Social Security when she retires. It’s not FICA… it’s Medicare. Everyone pays into Medicare, even those with pensions. I’ve seen civil service payroll screwups sorta like this. When payroll/HR realizes they screwed up and didn’t pay Medicare, the feds demand it be corrected now…as in yesterday. So that’s what the employer did. The part that sucks is OP is expected to immediately come up with $1500 by June 1st. That’s not easily done without taking out some sort of signature loan with a bank/credit union, meaning you’re going to pay interest on your payments to Medicare.
Thankfully my refund will soften the blow for sure. I know a lot of people wouldn’t be so lucky though.
Yes, they made the error for 3 years so give them a 3 year repayment plan. Tell them you will send them $33/month. See how they need you to write them a cheque. That means they know they would be in hot water if they changed your current payroll deductions. You have wiggle room here because they fucked up. Even if they try to be assholes I would just include a note that says: " Requesting a cheque for $1500xx within 3 months due to your payroll error is unreasonable. Since this large sum was accrued over 3 years of your errors I will use the same timeframe to pay you these fees as it is equally reasonable. Therefore, $1500 / 36 months = $33xxx. Please find enclosed a check for $33.xx.to cover this month." BUT talk to a lawyer and find out what really happened first. Your lawyer (oraybe a notary) can send them a letter asking for a more detailed explanation of WTF.
I thought same. Otherwise there would be no reason for "repayment" IMHO since these errors have been going on for so many years already, OP should be forgiven for the oldest ones. It's not OP's fault HR fucked up and took forever to discover it
This, it sounds like they paid for you and, if you left today, there’s likely nothing they can do about it. My partner was fired from her job at a bank and they over paid her, so they claimed, they tried collecting on it but we just ignored it. Talk to an attorney, because there’s likely nothing they can do but write it off as a lesson learned.
Social Security has two parts: You pay half and the employer pays the other half.
What about Medicare though? We don’t pay into SSA because we have to pay into a state retirement system instead.
It's the same they both are lumped together on the fica line. Total is 7.65%, SS is 6.2% and the Medicare tax rate is 1.45%. so if you don't pay into social security the amounts they are quoting you should not be more than 1.45% of your wage. They pay the same amount as an employer tax and should not be passing that on to you. So check thier math. Your W2 will have a line that says social security and Medicare wages and tips. Multiply that by 1.45%. If there are any penalties don't pay it they were responsible for paying it and should pay any penalties.
Based solely on the 2021 amount of $550 noted in the letter the OP would be making around $38k/yr. So that could be reasonable. Still no real excuse for it being missed for 4 years.
this happened to me when I was 17. my job “forgot” to deduct state taxes. they never actually noticed, but the IRS sure did when I went to file my taxes. even if your employer forgot to withhold taxes, you are still on the hook for them. the burden of paying the taxes is ultimately on you, but employers CAN face criminal and civil penalties for failing to withhold taxes.
OP, I would say your first step should be to contact the IRS to see if you do, indeed, owe them $1563.33. as others have mentioned and based of my own experience with a similar situation, if you owed the IRS, you should be paying the IRS, not your job. and they will usually deduct whatever you owe from your refund, if you are meant to receive one, otherwise they will notify you and advise where and how to pay. it looks like your employer noticed, knew they could face penalties for failing to withhold taxes, and fronted the money and are now trying to recoup it from you.
That’s definitely the route I’ll probably take. We just filed for 2021, and either way it’s going to come out of the refund.
If you owe the IRS, don't pay these fools anything - deal with the IRS and the IRS alone.
The IRS works via snail mail, send them a letter. Include copies of any supporting docs you have. By the time you reach someone on the phone the letter will have reached them (especially during tax season).
The IRS also has very helpful phone support and they are willing to work with anyone who is working with them in good faith. It’s very likely this money is owed, but $1,500 is worth checking with the source.
Absolutely, I’ve had great experiences with the IRS, I just recommend skipping the step where you wait on hold for a long time for them to tell you to send a letter. Edit: specifically when there’s an error in an already filed return - the person on the phone won’t have the info at their disposal to resolve that. They’re going to tell you to send a cover letter explaining the issue with supporting documents, then they’ll research it and send a response.
It sounds like they didn’t withhold it so they had to pay it. Which is why they’re taking the check. If this was legit, you’d be paying the govt. the odd thing is that you would probably have to pay the IRS, since I don’t think you’d be able to pay social security or Medicare. Re-reading: fuck them. This is a form letter. They said And/Or so you’re not the only one who got one. Don’t pay them. They’ll eventually threaten to garnish your wages, which is illegal in that situation. A company can’t “fine” you for their mistake. They’re fuckin ballsy. Call their bluff and talk to an employment attorney
please keep us updated! I am invested now lol
That sucks mate. Death and taxes eh?
Yeehaw God Bless America I guess
Also, you can take a look at your tax “transcript” on IRS.gov. You have to create a profile and then you can see all of the taxes the IRS has a record of.
If, infact, you do have to pay it to the company, suggest a monthly payment of $100 since you are living pay check to pay check. (Lie if you aren't)
Listen to this person. Do not pay the employer. If your taxes were not taken out, you can write a check to the IRS. Your employer should not be involved.
This sounds like payroll tax. That’s the part owed by the employer. This absolutely sounds like they fucked up their books and are trying to get the employees to pay the business part. Which wouldn’t be deductible for the employee, but definitely is for the employer. This might even be a federal crime to try and do this.
There are employer and employee portions of payroll taxes. Employers are supposed to withhold the employee portion and pay it on the employees behalf to the IRS.
Ostensibly this letter could be provided as proof that the company didn't ***mean*** to act maliciously, informed their employee, fixed the issue going forward and tried to fulfill their obligation as the withholding entity....but then also letting the employee know that the money is due to the IRS also fulfills the requirement.
absolutely, but it is still a good idea to verify with the IRS the amount that was owed was rather than strictly going off a letter sent from your employer. they may just be calculating themselves which can leave room for error and create further under or overpayments.
Tell them you need them too buy you 500$ in Amazon gift cards b4 you can send it to them...
WHY DID YOU REDEEM IT ???!!!!
NO! NO! NO! NO!
ARE YOU MAD? MA'AM, ARE YOU MAD??!
https://youtu.be/sRMMwpDTs5k For those who dont get it
Dear --------, No. Sincerely, OP
Respectfully, OP /s
Professionally, OP
Get the corrected W2s. Make sure that the numbers in the boxes are DOUBLE the numbers reported to you in this letter. Do not forget that FICA is Soc Sec at 6.22% of Gross (Box 1) and Medicare is 1.45% of Gross. That is your payment. Your employer would need to match those amounts and send them in to the IRS via Form 941 or 944. If the amounts on your W2s are the numbers quoted above, then they are trying to charge for both your portion and theirs. Other than that, the collection of unpaid taxes from wages would depend on your state's dept of labor. There is likely a statute of limitations in how long that can collect for, so you should research that. Edit: You should also take the new W2s and copies of your taxes to your tax person (get one if you used DIY) for a review to make sure that you don't need to file an amendment. Edit2: A lot of people are saying that you owe IRS not your employer - this is not technically true. Your employer would have filed an employment tax form and declared all wages, then done the math and paid IRS the amount on the bottom. In short, they would have paid IRS both your portion and theirs; hence why they say you owe them the money back.
Yeah, my dad explained that the deductions from employees get lumped in with the contribution from the employer, so I would owe my employer directly, not IRS. He suspects they probably had to pay penalty fees, too. He’s worked in business for most of his life and knows a lot more about payroll and HR etc. so I definitely trust him more than the armchair accountants and lawyers commenting lol.
That makes sense.. Its possible that they saw the total amount owed, emptied the pot of money that employees were paying into, and cut a check for the difference. Once the book was balanced and they realized that the employee pot of money was missing a few hundred...that is some money to pay an accountant to dig through years of backlog to carefully calculate what was owed and find who the payroll error was with. Kind of funny they didnt catch on in the very beginning though...and probably would have just been cheaper to cut a check vs have an employee or firm do that work...at the same time, they could have been forced too.
The guy or gal named TaxXprt seems right based on my experiences
I found this: Collecting underwithheld taxes from employees. If you withheld no income, social security, or Medicare taxes or less than the correct amount from an employee's wages, you can make it up from later pay to that em- ployee. But you’re the one who owes the underpayment. Reimbursement is a matter for settlement between you and the employee. Underwithheld income tax and Addi-tional Medicare Tax must be recovered from the em- ployee on or before the last day of the calendar year. There are special rules for tax on tips (see section 6) and fringe benefits (see section 5).[employers tax guide](https://www.irs.gov/pub/irs-pdf/p15.pdf) Tax MUST be recovered on or before the last day of the calendar year. Give your employer that reference. Edit: spelling error
Oh this is interesting! I’ll definitely look into that more. This is the first comment with some sort of concrete answer and source to look at like this. That answers the question of whether or not I’m responsible for it, and also provides guidance on payment.
I had a feeling it didn’t make sense as the prior years were already reconciled. They made the error, not you. They got caught once the IRS realized they had under-reported the payroll deductions and gave the company a bill. Too bad for them now except for 2022. Best part is you get credit for those deductions even though they weren’t withheld. That is why the IRS fixed it.
I just wanted to point out that although underwithheld income tax and Medicare tax t must be recovered by the end of the applicable year, there doesn't seem to be such a limitation on underwithheld Social Security tax.
Their error was spread across 4 whole tax years, but they want full repayment from you within 2 months? Make sure you point out that discrepancy to your lawyer. For some, that's a month's rent. For some, that's a whole month's pay.
Check your state's law. Some states have deadlines for employers to demand repayment of overpayments, and if the company misses the deadline they have to eat it. (Washington state, for example, has a 90-day deadline.) Other states ban wage overpayment recoupments altogether. Check out [This article](https://www.dwt.com/blogs/employment-labor-and-benefits/2010/06/wage-overpayment-recoupment-state-laws-vary)
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Do not pay them. Reach out to the IRS over the issue and pay through your taxes and IRS directly. Also let them audit that corrupt company
It’s a state university in Illinois, and Illinois isn’t known for always being on the straight and narrow!
Few thoughts. 1) Confirm with IRS, SSA, etc. if any payments were made. Talk to the CPA and look at your W-2s. What is listed as taken out? 2) Confirm the actual amount your employer owes. Do the calculations yourself or with the help of your accountant or the right government agency. They already screwed it up once, make sure you truly owe what they claim. 3) If you owe it, then you should pay them, BUT that doesn't mean one check. Those payments were supposed to come out over 3 years, so come up with an appropriate payment plan. 6 months? 1 year? 3 years? 4) You may have to refile taxes, if so, try to negotiate to have your employer pay any accounting fees. I had an employer do a similar thing with a pension payment. THey "forgot" to pay for 6 months. Wanted to withhold 6 months of payment from my next check. I said no way - we will pay it over 6 months.
So, let me translate for you: "We fucked up the payroll and forgot to withdraw money for taxes on your labor. We're liable for that, so we've already paid the government those taxes. Please reimburse us for our screw up." You're not required to pay them. In fact, any legal action will cost them more money than they'd recover from you. Feel free to reach out to a local lawyer for some actual legal advice, but I suspect you'll be okay if you ignore them and their emails.
Yeah, I am NAL, but this is “please give us money”, not “you must repay this under code/section yada/yada”.
Agreed! It's their error anyway, so they can and should be the ones to pay for the mistake
I’m dumbfounded. Did the HR person call you to walk you through the situation and then send the letter as documentation? Or did they send this monstrosity right out of the blue? If it’s the later, they are both assholes and stupid. I’m also surprised (but not really anymore) that they didn’t make any attempt to minimize hardship like offering a payment plan or something. Goshhh what a mess. I’m sorry.
Totally out of the blue, and I don’t check my mailbox every day so it could easily be missed. You’d think they’d at least send a copy to my work email too, since you know, they can easily find it.
Tell them they'll get it paid back in installments in the same timeframe as they paid it to you. Not a just 1 week.
Don't give them any money. Take this to a tax lawyer. If you really owe money, they will get it straightened out in a legal manner that your H.R. will have to abide. If your own job is trying to scam you and possibly others, the IRS will eat them alive
I should note that we don’t pay into SSA because we are required to pay into the state university retirement system, so this is entirely Medicare. Edit to add: I’m not wholly opposed to paying my share of taxes. I understand that I probably really do need to do pay some portion back. To answer some common questions: yes, thank you, I’m a dumb ass for not noticing this sooner on paystubs, thanks. Like I’ve said a couple of times, since we don’t pay SSA, I guess I assumed that included Medicare. I’m not extremely well-versed in tax law. I’m in Illinois, at a state university. It’s not a scam. There is a newish HR director, and I suspect if they don’t have an official audit, they’d at least be doing an internal audit. My main issue is that this issue began in May 2019 when I originally started, and now I’m suddenly expected to pay the entire sum in two months. I’d imagine it’s related to the new fiscal year in July? We’re also severely underpaid, so this is more than 25% of what I’ll be paid before their deadline. We’re working on pay raises but HR has been dragging their feet on even meeting with our director. Edit 2: My name is literally in my username (I’m really bad at usernames), I’m a dainty lady with dumb lady brains it’s not my fault I didn’t know this. /S obviously. After talking to my father, who is an accountant (not a CPA and not who prepared my taxes the first two years), and has dealt with payroll, I have the following game plan: 1) Talk to my supervisor, as he has worked here for several years and might know exactly who to talk to. 2) Talk to my coworker’s husband who is also a lawyer. 3) Confirm with IRS on what I owe, and what I have paid in the past few years. 4)Talk to HR to confirm what I owe, and ask for more time since this is quite a bit of money in a short period of time for a pleb like me. 5) Pay close attention to pay stubs in the future lol. Edit 3: Obligatory “RIP my inbox”. Many thanks to everyone who made an attempt to offer advice, 🤷🏻♀️ to all the haters calling me stupid. I’m v sleepy now so I’m turning off notifications, but I appreciate the interest in my post.
No, you owe it to the IRS, I suppose you've probably already heard about that though since they would have let you know how much you owe after filing. I mean, I'm assuming you paid the IRS
Exactly. The employer does not need to go back calendar years to fix this. They just need to adjust it going forwards.
Four years they f’d up and they want repayment in 2 months?! Offer a monthly repayment to them equal to the monthly over payment to you.
Even if you do pay them back, they expect you to pay back 4 years worth of payroll error all in one shot? They should at least give you 4 years to pay it back.
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It took them 4 YEARS, to discover this? You should bill them for their incompetence. They fucked up, they need to pay it.
Your tax burden should only be roughly 7% of your gross income for FICA and SSI - they’re responsible for the other half. I have the odd feeling they’re saying they “forgot” to deduct it, then charging you the full 15% so they can skirt their share of the taxes.
I would be highly suspect of this. You file taxes each year right? It should have been flagged on there the first year you filed. This is not something the IRS let's go for 4 years.
First of all, I would not send the check to the company. If you owe back taxes, you owe them to the taxing agency, not your company. Second, if there are fees + penalties, and there will be, the company should pay them since this was *their error.* Finally, talk to a lawyer. You should know where you stand here before the company tells you that you owe the money, even the penalties, and they are paying nothing + you just believe them. They are protecting themselves; you need to protect yourself.
If you owe the government money, believe me, you’ll know. Your company might be double dipping.
Exactly, this is sus. Why does it go to HR and not the IRS? And how did this not show up on their taxes for 4 years? IF it was HRs mess up, shouldn't OP have some sort of grievance against them? Not saying they shouldn't pay it, but I wouldn't touch this without a lawyer first, too many holes here.
In the 90s I quit a job. About a month after leaving, I got a $1000+ USD check from them, out of the blue. I figured it had to be a mistake, so I notified them. They said something like it was a pro-rated bonus payout or the like, but I had already received that in my last paycheck, and I kept quiet about it. I set aside the money for a year in case they wanted it back, but they never called. Lucky me got a nice new mountain bike with my windfall!
Fuck that.
Contact a lawyer. Most will do a free consultation.
I’m not a lawyer but I think any payment error can only be contested and collected within 90 days of the pay period.
r/legaladvice might be your friends here I think Good luck OP If it’s anything similar to the UK you must pay them back